Kneat Solutions, the Limerick-headquartered software company listed in Toronto, has agreed to sell itself to US private equity group Thoma Bravo for 650 million Canadian dollars (€404 million).
The company provides software for life sciences, healthcare and other heavily regulated industries, was founded in 2007 by Eddie Ryan, Kevin Fitzgerald and Brian Ahearne. While its operational headquarters remain in Limerick, it officially became a Canadian company in 2015 after a reverse takeover that led to a listing on the Toronto exchange.
Kneat’s platform is built to turn important information into digital form so it remains accurate and can be tracked easily. This is seen as particularly useful in life sciences, where companies have to follow strict rules to make sure everything is safe and properly tested.
For customers, this means Kneat’s system helps create a reliable base so they can safely use AI in industries that are heavily regulated, according to Thoma.
READ MORE
It is used by most of the leading life sciences companies globally, including Biogen, Pfizer and Sanofi.
The news comes just weeks after Kneat said it was considering a sale of the business under a so-called strategic review.
The agreed purchase prices represents a premium of approximately 40 per cent to the closing price of the shares on May 8th, the last trading day prior to Kneat announcing an ongoing strategic review, and a premium of approximately 20 per cent to last Friday’s closing price.
“We are thrilled to partner with Thoma Bravo, who we are confident it will help us accelerate our mission and our position as the leader in digital validation and quality process automation for life sciences at an exciting time for the industry,” said Ryan, chief executive of Kneat. “We are energised by the path we are announcing today which delivers value to all our stakeholders.”
The management team will remain in place following the closing of the deal.
“In today’s increasingly complex regulatory environment, more customers are looking to Kneat to provide them with greater control, efficiency, and real-time visibility across mission-critical compliance workflows,” said Adam Solomon, a partner at Thoma Bravo. “We are confident we can apply our operational expertise and deep experience working with market-leading software companies to accelerate Kneat’s growth.”
Kneat reported last month that its first quarter revenues rose 22 per cent to 18 million Canadian dollars, while annual recurring revenue was running at 76.4 million Canadian dollars as of March, marking a 20 per cent increase on the year.
Directors and management of the company own about 21.9 per cent of the outstanding shares and plan to back the deal. Certain directors and managers are being offered an opportunity to roll a portion of their shares into the vehicle being used to carry out the purchase.
